Some of downtown San Antonio’s oldest buildings will become its newest homes.
Developers are turning old hotels and office buildings into new apartment complexes. Such is the case of the Tower Life Residences, set to open in 2026, which was built nearly 100 years ago and served as a Sears department store.
Peter Brodnitz, chief marketing officer for McCombs Enterprises, partnered with other developers to buy the Tower Life Building on St. Mary’s Street in 2022 with an eye on transforming it into apartment housing. Brodnitz sees an appetite for urban living that will fill more than 200 residential units, including studios, one- and two-bedroom units and three larger penthouses.
“There wasn’t as much of a call for downtown office space,” Brodnitz said. “[Housing] is what San Antonio needs.”
Less than a mile away, downtown developer Weston Urban is building another mixed-use development, in the Continental Hotel, built around 1896.
“The Continental Residences offers a variety of floor plans, including studios, one- and two-bedroom units, and even townhomes. And there is significant variety within those categories,” said Mary Ullman Japhet, who is serving as a spokesperson for Weston Urban on the project.
The Continental Residences are even closer to completion and pre-leasing for those 290 units has already started.
Is there a market for more apartments?
Between the Continental Block and Tower Life Residences, 500 units of upscale apartments will hit downtown San Antonio over the next year. Rents in the area have dropped over the last 12 months by 1.4%, but people still want to move into downtown, said Danny Khalil, associate director of market analytics for CoStar Group.
“We’ve seen pretty strong demand downtown, really in the last decade, for multifamily living,” Khalil said.
CoStar Group owns marketing websites homes.com and apartments.com.
Peter Brodnitz, chief marketing officer for McCombs Enterprises, shows floor plans for one of the Tower Life penthouses that will occupy the 29th and 30th floors of the historic downtown building. Credit: Amber Esparza / San Antonio Report
Downtown San Antonio tends to have higher demand and occupancy rates compared to other parts of San Antonio, Khalil said. While rents dropped slightly over the past year in downtown, Khalil said, the cost of rent dropped by 3.4% throughout the wider San Antonio-New Braunfels area.
Khalil expects to see construction downtown decrease in the near future.
Residential development increased after the pandemic, he said, when interest rates were low and it was easier to acquire capital for large projects. Developers started gathering funds and designing projects in 2021 and 2022, Khalil said, and those projects are only arriving now.
It might not be the same in two or three years.
“Since 2023, there aren’t that many apartment complexes getting off the ground,” Khalil said. “You’re not going to see much get [built] in 2027.”
Who will live in these new communities?
People like Brodnitz see these new buildings as communities.
“The idea is to activate the space and activate the neighborhood,” he said.
Both the Continental Block and Tower Life Residences will include commercial space. McCombs is still trying to figure out how best to use its large basement and River Walk-facing space, Brodnitz said, but he wants those to be more oriented toward residents rather than tourists.
The northern wall of the historic Tower Life building, pictured on the right, faces the San Antonio Riverwalk. Its owner McCombs Enterprises says this area could be home to retail space targeted to residents. Credit: Amber Esparza / San Antonio Report
“It’s not going to be tourist T-shirt shops,” he said.
Tower Life Residences hasn’t established monthly rents yet, but Continental Block has. Half of the units there will be reserved for residents who make less than San Antonio’s area median income, roughly $62,000 for a one-person household.
“The price for income-restricted apartments ranges from $1,200 to $1,932.00 per month. All other apartments reflect the downtown residential market rate,” Japhet said in an email.
Fair market rent for a one-bedroom apartment in downtown San Antonio is around $1,260 and would require someone to earn more than $24 an hour, according to the National Low-Income Housing Coalition.
Kayla Miranda, the housing and justice organizer for the Coalition for Tenant Justice, said she is concerned about downtown affordability for low-income residents.
The federal government defines any renter that spends more than 30% of their income on housing as cost-burdened. That includes rent, utilities and other charges.
People making a median income of around $62,000 would be able to spend around $1,550 per month on housing. Miranda said utilities and other monthly housing costs could total between $200 and $400.
Miranda said she is concerned that the costs of construction and financing capital projects through borrowing from banks are driving up rents in new buildings and that other landlords will follow suit.
“The people who live in San Antonio will not be able to afford to live in downtown,” she said.